Buffalo Law Review Buffalo Law Review
Volume 28 Number 1 Article 4
1-1-1979
Because All the World Was Not New York City: Governance, Because All the World Was Not New York City: Governance,
Property Rights, and the State in the Changing Definition of a Property Rights, and the State in the Changing Definition of a
Corporation, 1730-1860 Corporation, 1730-1860
Hendrik Hartog Indiana University School of Law (Bloomington)
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Recommended Citation Recommended Citation Hendrik Hartog, Because All the World Was Not New York City: Governance, Property Rights, and the State in the Changing Definition of a Corporation, 1730-1860, 28 Buff. L. Rev. 91 (1979). Available at: https://digitalcommons.law.buffalo.edu/buffalolawreview/vol28/iss1/4
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BECAUSE ALL THE WORLD WAS NOT NEW YORK CITY:GOVERNANCE, PROPERTY RIGHTS, AND THE
STATE IN THE CHANGING DEFINITION OFA CORPORATION, 1730-1860
HENDRIK HARTOG*
INTRODUCTION
T here is a standard history of the corporation in American legalhistory. Until the early years of the 19th century, it is said,
all corporations were public institutions-derivative agencies of thestate. Capitalists and legislators copied city charters-grants of pub-lic power-to create an American business corporation. The sup-posed attractions and advantages of corporate form-chiefly, limitedliability and the "fiction" of corporate existence-were neitheravailable nor necessarily of interest to businessmen of that period,and the only real advantage offered by the state-chartered corpora-tion over other ways of organizing business was its very creation bystate government. Entrepreneurs wanted to attach themselves tothe interests of the mercantile state.'
The modern private corporation is therefore said to be thechild of a narrowly public form of organization. Reaching maturityin the second fifth of the 19th century, it wrapped itself in the con-tract clause and made for itself a rich-and autonomous-future.Public corporations, on the other hand, drifted on in senile depen-dency, mere "administrative subdivisions" of the state.'
This is the conventional wisdom, a wisdom that unites neo-marxist with new dealer, institutionalist with historian of doctrine.Yet, we do not know what it meant to be defined as a "public" cor-poration in 18th century America. What sort of autonomy, what
* Assistant Professor of Law, Indiana University School of Law (Bloomington). Re-search for this article was conducted with the support of the Committee on the History ofAmerican Civilization at Brandeis University and a Crown Family Fellowship. Earlierversions were read to a Faculty seminar in Bloomington and to a session of the AmericanSociety of Legal History in November 1977.
1. See E. DODD, AMERICAN BusINEss CORPORATIONS UNTIL 1860 (1954); 0. HANDLIN &M. HANDLIN, COMMONWEALTH (rev. ed. 1969); L. HARTZ, ECONOMIC POLICY AND DEMOCRATICTHOUoIr: PENNSYLVANIA, 1776-1860 (1948); M. HorwrTz, THE TRANsFoR MATION OF AAERI-CAN LAW, 1760-1860, at 111-14 (1977); J. W. HURST, THE LEGITIMACY OF THE BUSINESS COP-PORATION IN THE LAW OF THE UNITED STATES 1780-1970 (1970); Handlin & Handlin, TheOrigins of Business Corporation, 5 J. ECON. HIST. 1 (1945).
2. 0. HANDLIN & M. HANDLIN, supra note 1, at 236.
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sort of free enterprise, was implied or expressed in an 18th centurycharter? The history of the corporation has been written as the his-tory of the emergence into "privateness" of a formerly public insti-tution. But what was so "public" about a municipal corporationin either 18th or 19th century America that allows us to differen-tiate it from the "emergent" business corporation? This articlesketches out one possible answer to these questions, using NewYork City as a case study. But more fundamentally, this articleshould stand as a provocation, as a challenge to the easy assumptionthat words mean what we think they mean.
I. THE CONCEPT OF A MUNICIPAL CORPORATION
Well before the Civil War, perhaps as early as 1830, NewYork City had become, legally speaking, a municipal corporation.To a modern lawyer, such a statement may seem tautological. Whatelse, legally speaking, could a city be if not a municipal corporation?But, until the beginning of the 19th century New York City hadbeen something else. The chartered corporation of mid-18th cen-tury New York City was not municipal in character, at least as theterm "municipal" was understood in mid-19th century Americanlaw. It was a member of no statutory category of public corporation,but rather was a singular institution established to serve a partic-ular local constituency.
What then is a municipal corporation?3 In the manner of adogmatic 19th century judge we might begin as follows: An Amer-ican municipal corporation is a public corporation created by astate legislature for the purpose of providing a government for acity or town. As a public corporation, it lacks the contractual guar-antee of independence that characterized the private corporationafter the Dartmouth College case.4 Its charter is not simply thelegislative document that created it; rather its "charter" is usuallyseen as the sum of all the legislative determinations affecting itsexistence. (For New York City this meant a document that by1882 was somewhat larger than the entire French Civil Code.')The rights and powers of a municipal corporation cannot be fixed;they do not vest in the corporation against the state-nor against
3. See H. Hartog, The Creation of an American Municipal Corporation: 1820-1870(1974) (unpublished manuscript).
4. Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 517 (1819).5. M. KELLER, AFFAIRs OF STATE 115 (1977).
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private individuals. A municipal corporation is whatever the statelegislature says that it is, and it does whatever the state legislaturesays that it can do.6 Municipal corporations have a limited "ca-pacity" to act and be bound by private contracts.7 "[B]ut indepen-dently of that power . . . they have no more authority to makesuch a grant than any other administrative board in the state." s
We might well question the accuracy of this definition. Whatis "municipal" about an administrative agency of the state? Andwhat can we say about a "corporation" that has no personality ex-cept such as the legislature deigns to grant it-that it seems to be alittle other-directed? We might, in fact, want to argue that a betterdefinition of a municipal corporation would emerge from a con-sideration of the corporation as the government of a town or cityrather than as the agent of the state. A municipal corporation, afterall, ought to be regarded as the embodiment-the incorporation-of the locality, as the legal entity that stands for the community.'
In the mid-19th century, however, municipal corporationswere not viewed in that light. The notions of a "corporation of acity" and a "municipal corporation" were not precisely synony-mous. Today, "municipal" is used in common parlance to substitutefor a city name, or to describe a city institution.10 Yet even todayboth the Webster's Dictionary and the Oxford English Dictionarydefine the word "municipal" in very different terms: "of or relat-ing to the internal affairs.., of a nation."11 Through the first two-
6. Consider, for example, the Wisconsin case of Dean v. Charlton, 23 Wis. 590 (1868),in which the city of Madison was forbidden from paving its streets with an improved,patented process called Nicholson Pavement because its charter required that all contractsshould be let out by auction to the lowest bidder. Dean was later limited to its facts byKilvington v. City of Superior, 83 Wis. 222, 53 N.W. 487 (1892).
7. "Like a state, it has its public duties and its private rights." Some municipal dutiesare not duties of the sovereign, but rather are undertaken as a private citizen. And assuch, a municipal corporation can be held to its contractual obligations. Western Say.Fund Soc'y v. City of Philadelphia, 31 Pa. 175, 182 (1858).
8. Davis v. Mayor of New York, 14 N.Y. 506, 523 (1856).9. "A corporation is properly an Investing the People of the Place with local Govern-
ment thereof, and therefore their Laws shall be binding to Strangers; but a Fraternity issome People of Place united together in Respect of a Mystery and Business into a Com-pany, and their Laws and Ordinances cannot bind Strangers, for they have not a localPower." G. JACOB, A NEW LAW DiarIoNARY (5th ed. 1744); see also the conclusion ofThomas Madox's early English essay on the legal structure of cities: "There were severaladvantages which a Corporate-Town had over a Town not-corporated. The encorporationfitted the Townsmen for a stricter Union amongst themselves, for a more orderly andsteady Government, and for a more advantagious course of Commerce ..... Madox,Firma .Burgi 295-97 (1726).
10. BLACK'S LAW DicTroNARY 1168 (4th ed. 1968).11. WEBsR's TiR NEW INTEP ATIONAL DIcmONARY 1487 (1967); accord, 6 OXFORD
ENGLIsH DiCtnoNARY 767 (rev. ed. 1961).
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thirds of the 19th century it was exclusively in this sense of internalstate law that the term "municipal law" was used. As such, it be-came a category of great utility to American law writers. ChancellorKent, for one, presented his strongest arguments for judicial reviewof legislation and the necessity for a "reception" of English com-mon law in a section of his Commentaries entitled, "Of the Var-ious Sources of the Municipal Law of the Several States."'1 2 JohnNorton Pomeroy, for another, called his Civil War era primer onAmerican law An Introduction to Municipal Law.8 In neithercase was there any mention of laws or rules relating to local govern-ment.
Etymologically, of course, the word "municipal" does derivefrom the Latin word for city. But, as the first edition of Bouvier'sLaw Dictionary explained, the significance of the word lay not somuch in its reference to a city as in its reference to a single legaland political jurisdiction. Cities joining the Roman republic weresaid to retain "their laws, their liberties and their magistrates." So,said the dictionary writer, Americans applied to the term a "moreextensive meaning: for example, we call municipal law not the lawof a city only, but the law of the state."' 4
The idea of a "municipal law" encompassed two central no-tions of 19th century public law: the uniformity of law within ajurisdiction and the supremacy of the state as a source of powerand authority. Both of these notions helped shape the way Amer-icans thought about municipal corporations in the years after 1835when the term "municipal corporation" began to come into gen-eral legal use."8 As the law of municipal corporations developed,
12. 1 J. KENT, COMMENTARIES ON AMERICAN LAW 419-58 (1st ed. New York 1826).13. J. POMEROY, AN INTRODUCTION TO MUNICIPAL LAw (New York 1864). See also
1 J. BOuvIER, INsTITuTEs OF AMEUCAN LAw 6 (Philadelphia 1851).14. BouvIER's LAw DICTIONARY (Philadelphia 1839).For Blackstone, who may have invented modem Anglo-American usage of the term,
"municipal law" stood for an English equivalent of the jus civile of the Continent (orwhat later English lawyers would call "positive law'): "I call it municipal law, in com-pliance with common speech; for, though strictly that expression denotes the particuarcustoms of one single municipium or free town, yet it may with sufficient propriety beapplied to any one state or nation which is governed by the same laws and customs."Municipal law, as Blackstone repeated almost interminably, is "'a rule of civil conductprescribed by the supreme power in a state, commanding what is right and prohibitingwhat is -wrong."' 1 W. BLAcEsTONE, COMMENTARiES 0 44.
15. The most important source for the growing use after 1835 of "municipal corpo.ration" as a legal category was probably the English Municipal Corporations Act of thatyear. But see People v. Morris, 13 Wend. 325 (N.Y. Sup. Ct. 1835). As late as 1865, Bouvier'sLaw Dictionary had no separate heading for municipal corporation. By the 1890's, on theother hand, dictionary definitions go on for pages, showing the complexity and significanceof the subject.
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the two characteristics with which that law was most frequentlyidentified were the subordination of local government to statepower and the development of abstracted, statewide, public formsof local government. To lawyers like John F. Dillon, local govern-ment was everywhere the same. Municipal corporations were insti-tutions that "for purposes of subordinate local administration"were invested with a corporate character.16 Their powers werelimited, dependent, circumscribed, and defined in Dillon's famousrule:
It is a general and undisputed proposition of law that a municipalcorporation possesses and can exercise the following powers, andno others: First, those granted in express words; second, thosenecessarily or fairly implied in or incident to the powers expresslygranted; third, those essential to the (accomplishment of the) de-dared objects and purposes of the corporation,-not simply con-venient, but indispensable. Any fair, reasonable (substantial) doubtconcerning the existence of power is resolved by the courts againstthe corporation, and the power is denied.17
It is worth remembering that in order for there to be ruleslike Dillon's that limited and defined the exercise of local author-ity, there first had to be the assertion of governmental authority.As Jon Teaford has written, "[T]he ideal of a diffuse-purposemunicipality resulted in an ever expanding range of civic func-tions."' 8 Streets were built, swamps drained, wells dug, aqueductsconstructed, police forces hired as cities responded to the unprece-dented urban growth of the first half of the 19th century.19 Thephysical artifacts of public power were everywhere. From thestreets of New York City to the sidewalks of tiny Medina, courtswere faced with the legal consequences of governmental action.20
At the same time that municipalities were forced to recognizetheir explicitly dependent status in the polity of the state, thosesame municipalities created a complex and growing range of pub-lic services. A paradox, perhaps. But not one that should troubleus much here. In the political theory of American republican gov-ernment the very assertion of positive power depended on theascendancy of the state. Where the people of a state were sovereign,
16. 1 J. DILLON, MUNICIPAL CORPORATIONS 96 (2d ed. 1873).17. Id. at 173.18. J. TEAFORD, THE MUNICIPAL REVOLUTION IN AmERICA 115 (1975).19. Crowther, Urban Growth in the Mid-Atlantic States, 1785-1850, 36 J. OF ECON.
HiSr. 625 (1976).20. See Cole v. Village of Medina, 27 Barb. 218 (N.Y. App. Div. 1858).
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local government could act only insofar as it drew on the authorityof the whole state, and acted as its agent. Positive governmentalauthority was always state governmental authority.2
II. PROPERTY RIGHTS, AUTONOMY, AND AUTHORITY
Nineteenth century New York City shared in this conceptionof the public, dependent, state-centered origins of local govern-ment. By the 1850's the traditional legal identity of a charteredcity had been transformed. All that remained of the city's tradi-tional property rights was a romantic memory.22 The city had be-come an adjunct of a state administrative system. Through thefirst half of the 19th century, New York City had been the recipientof extraordinary attention from the state legislature, attention thatalone would have distinguished it from other local governments.But the effects of that legislation were to supercede the charteredrights and liberties that had once been formative of an autonomouscorporate entity. New York City acted, but under mandate of thestate. And though physical evidence of its social, economic, anddemographic singularity was everywhere, at some deep and signi-ficant level of legal and constitutional theory, New York City hadbecome just another municipal corporation-one of many institu-tions dependent on the state for authority and existence.23
One hundred years earlier, the legal existence of New YorkCity had not been tied to any externally defined category of de-pendent administration. What was to become the municipal cor-poration of New York was "the Corporation of the city of NewYork." And, in 1731, that Corporation had been endowed with allof the powers characteristic of an English commercial city or bor-ough.24 The "Mayor, Aldermen, and Commonalty" of the city were
21. Sharpless v. Mayor of Philadelphia, 21 Pa. 147 (1853). See generally G. WooD,THE CREATION OF THE AMERICAN REPUBLIC (1969).
22. See M. HOFFMAN, TREATISE UPON THE ESTATE AND RIGHTS OF THE CORPORAION OF
THE CITY OF NEW YORK, AS PROPRIETORS (2d rev. ed. New York 1862) (1st ed. New York1853), and compare his sentimentality with the realistic conservatism found in J. KENT,THE CHARTER OF THE CITY OF NEW YORK (New York 1836).
23. People ex rel. Wood v. Draper, 15 N.Y. 532 (1857); Davis v. Mayor of New York,14 N.Y. 506 (1856); Mayor of New York v. Furze, 3 Hill 612 (N.Y. Sup. Ct. 1842); Bailey v.Mayor of New York, 3 Hill 531 (N.Y. Sup. Ct. 1842). But see People ex rel. Bolton v.Albertson, 55 N.Y. 50 (1863); Rathbone v. Wirth, 6 A.D. 277, 40 N.Y.S. 535 (1896).
24. New York City had held earlier charters dating from 1653, 1665, 1686 (the "Don-gan Charter"), 1708 (grant of the ferry monopoly); but, the Montgomerie Charter wasthe first charter to come under Royal seal and was regarded as incorporating all previouscharters or grants of authority.
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declared to be "one body corporate and politic," able to sue and besued in all courts and to hold property of any kind: in all ways afree person before the law. The Common Council was empoweredto make laws "for the farther public good, common profit, trade,and better preserving, governing, disposing, letting and setting, ofthe lands, tenements, possessions, and hereditaments, goods, andchattels" of the city, and to enforce its rules with fines and otherpenalties.25 Most important of all, the charter confirmed not justthe general and autonomous governmental jurisdiction of cityauthority, but also granted the city an indefeasible and absoluteright to much valuable property. The ownership of the "waste andcommon land" of Manhattan Island (at the time, most of the islandnorth of Wall Street), much of the shoreline of what is now Brook-lyn, and the ferry lines between the city and Long Island were allconfirmed by the 1731 charter. In addition, the new charter gavethe city title to all the land lying under water surrounding thesettled city up to 400 feet beyond low water mark. This last grantwas in addition to the grant of title to all the waterlots betweenhigh and low water mark around the whole island that had beenpart of an earlier charter, and which the 1731 charter confirmed.
The Montgomerie Charter affirmed the legal and governmentalsingularity of the city of New York. No other city would have suchspecific and detailed rights granted to it. The Corporation of thecity of New York was a member of no general category of corpora-tion; indeed, we might speculate that a general category of corpo-ration would then have been seen as a contradiction in terms, sincea corporation was always defined by stipulated and locally deter-mined rights.
At the same time, the charter of the city did bear a stylisticand structural resemblance to the charters of many contempo-raneous British boroughs. 26 What set the Corporation of thecity of New York alongside other British corporations (and set itapart from other forms of local government in provincial America)was not its control over trade and commerce 27 The charter didgrant the city substantial powers of regulation over economic rela-tions within the city, but those powers differed only in quantityand emphasis from the ordinary exercise of authority of other forms
25. See J. KEr, THE CHARTER OF THE CITY op NEW YoRK (New York 1851).26. J. TEAFORD, supra note 18, at 3-15.27. Id. at 16-34.
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of local government in early modern America." What distinguishedthe charter of New York City from delegations of power to otherlocal governments was the explicit grant of a sphere of autonomyand instrumental authority defined and described by propertyrights. As in other governmental entities, the .practice of govern-ment in colonial New York City was functionally undifferentiated;judicial, administrative, and legislative powers were blurred anddiffuse. The property rights confirmed and granted by the Mont-gomerie Charter gave New York City, unlike most towns and coun-ties, a potential for discretionary decisionmaking that went farbeyond the propertyless powers of county justices of the peace ortown selectmen.
The wealth granted to the city by the charter freed it from theneed to lay regular taxes on the citizens of the city. The fact thatthe charter had not granted the city an autonomous power of self-taxation-which to us would seem a significant inroad into its au-tonomy-was really almost irrelevant until the 1760's.0 If the cityhad needed to raise revenue by taxation it would have needed di-rect authorization by the provincial New York legislature. Butonly on four occasions between 1731 and 1750 was the need forrevenue so great that city officers had to seek authorization from thelegislature to lay a tax-" Rents and other corporate revenues wereusually sufficient for the purposes of municipal governance, andone might guess that the existence of "a freely disposable income"gave the Corporation concrete affirmation of its autonomousstatus.31
Fundamentally, property rights gave to the Corporation aform of governmental power unavailable to unchartered local insti-tutions. To understand how that could be so, it is best to begin notwith the property rights themselves but with the theory of gover-nance that underlay the exercise of those rights. What was the pur-pose of government? What was government supposed to do? In18th century terms, perhaps the best answer to those questionswould have been that government ought to do little, that its rolewas to ensure that others did as they ought to. One would not
28. See generally Haxtog, The Public Law of a County Court; judicial Governmentin Eighteenth Century Massachusetts, 20 Am. J. LEGAL Hisr. 282 (1976).
29. G. EDWARDS, NEW YORK AS AN EIGHTEENTH CENTURY MUNICIPALITY 197-99 (1917).30. 2 COLONIAL LAWS OF NEW YORK ch. 669 (1739); 3 COLONIAL LAWS OF NEW YORK
ch. 711 (1741), ch. 820 (1746), ch. 842 (1746).31. F. IMTLAND, TOWNSHIP AND BOROUGH 204-05 (1898).
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separate public from private action since private individuals werecharacterized by their public obligations. And the function of gov-ernment was, as I have described it elsewhere, to enforce the peace-to maintain the order of society by insisting that private indi-viduals fulfilled their public responsibilities. 2
There was, as a result, little that one could consider direct gov-ernmental action or service. Government did not act so much as itensured and sanctioned the actions of others. The characteristicforms of governmental action were not street cleaners or roadbuilding crews; they were ordinances obliging residents to cleanthe portions of streets abutting their houses or presentmentsagainst the selectmen of a town for failing to maintain or repair ahighway or, in New York City's case, a lease or grant of corporationproperty.
In this context of action, or inaction, the property rightsgranted New York City through its charter allowed it to achievegovernmental objectives that were beyond the reach of unproper-tied local governments. Instead of mere sanctions against failuresof performance, the city could offer leases, licenses, and grants toprivate individuals willing to support various city-defined goals.New York City did not itself build streets, fill in swampland, ordig wells; the public works projects that characterized 19th centuryurban governance would have seemed incomprehensible to the cityfathers of 18th century New York. But where a county court couldonly present a town or individual for failing to maintain a streetor bridge, New York City's property allowed it to plan and initiateaction in a way that did not do violence to the basic premises of18th century governance.
In one sense, the use of corporate wealth to achieve specificgovernmental objectives bespoke a kind of fuzziness in the waymen and women thought about the nature of public power: "own-ership blends with Lordship, rulership, sovereignty."33 As Mait-
32. Hartog, supra note 28. See also F. MArrLAND, supra note 31:It is long before the community outgrows the old, automatic, self-adjusting,
scheme of 'common' rights and duties. Cambridge was very dirty; its streets wereunpaved. In 1330 the masters of the University complained to the King in Parlia-ment. What, let us ask, will be the answer to their petition? How ought the townto be paved? Should the municipal corporation let out the work to a contractor, orshould it institute a 'public works department'? Nothing of the sort. The mayorand bailiffs should see that every man repairs the road over against his own tene-ment. That is the way in which the men of Cambridge should pave the town ofCambridge. That is the way in which they will pave it in the days of Henry VIIIand of George III.
Id. at 79 (footnotes omitted).33. F. MvrrLAND, supra note 31, at 11.
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land has written, "The 'belongs' ... of private law begins to blendwith the 'belongs' of public law." 84 At the same time, it was a con-sciously created fuzziness. The New York City Council knew whyit was asking for ownership of the waterlots surrounding the cityin the 1720's and 1730's. 5 Property rights defined the singulargovernmental authority of the Corporation of the city of NewYork.
Consider the waterlots that the city granted to many resi-dents in the years after 1731. To an earlier generation of Pro-gressive historians these grants typified the corruption of the Cor-poration-an earlier version of the shame of the cities. In a classicstudy of New York as an 18th century municipality, George Wil-liam Edwards wrote that "[t]hese transfers were not only short-sighted, but at times even scandalous, for individual magistrateswere often questionably involved in the transactions."30 Relyingon an exchange of letters in the Independent Reflector in 1753that seems to indicate the existence of what Milton Klein has called"a shady land deal by which some local businessmen, in collusionwith the City Council, planned to get valuable shoreline propertyfor a song,"3' 7 Edwards and other historians have assumed that therecould be no good reason why the Corporation would grant away itsrights in the waterlots3 8
34. Id.35. It would not be illegitimate to argue that the main reason why the members of
the Corporation wanted to secure the new charter was in order to secure the rights to thewaterlots. The first time there was any mention in the minutes of the Common Council ofthe "need" for a new charter occurred in 1722 after Gerritt Vanhorne petitioned the Gov-ernor for a grant of "all the Land that may be Gained out of the East River [betweenMaiden Lane Slip and the end of Wall Street] ... to Extend into the Said River twohundred foot with Liberty to Erect Buildings Cranes Stairs. &c: And to Receive the Profittsand Wharfage thereof." Given "the great prejudice the Granting thereof may be to thePublick in Generall and this Corporation in particular" the Council decided to petition fora new charter that would include a "Grant of all the Land that might be Gained out ofthe River . . . with Such Other Privileges Franchises and Immunities as are UsuallyGranted to Citys & Towns Corporate in England." 3 MINUTES OF THE COMMON COUNCIL271-72 (Jan. 22, 1722).
In every petition thereafter the waterlots headed the "wish" list of the Corporation. 4MINUTES OF THE COMMON COUNCIL 5-8, 19-22 (Sept. 17, 1730). It is also relevant to notethat Vanhorne was bribed to withdraw his petition to the Governor with a promise thatwhen a new charter was obtained he would get a 400 foot lot instead of the 200 foot lotfor which he had petitioned, see 4 MINUTrs OF THE COMMON COUNCIL 25 (Sept. 17, 1730);a promise that the Corporation fulfilled in 1734. 4 MiNUms or THE COMMON COUNCIL 211(June 28, 1734). See also GRANT BOOK B, Municipal Archives and Record Center, New YorkCity.
36. G. EDWARDs, supra note 29, at 150-51.37. THE INDEPENDENT REFLECTOR 30 (M. Klein ed. 1963).38. C. BRIDENBAUGH, CITIES IN REvOLT 39 (1955).
THE CORPORA TION, 1730-1860
But, putting aside the juridical question of collusion andfavoritism in the case of specific grants,39 let us begin by askingwhat it was that grantees got from the city "for a song.'"40 Typi-cally, they got a lot that extended 200 feet into the East River41
beyond low water mark, which was between 1642 and 116 4 feet inbreadth. And along with title they received the right to chargeboats and merchants for dockage, wharfage, and cranage. But,along with title they also accepted a set of highly restrictive andburdensome covenants that ran with the land, and that determinedthe ways in which the land would be developed. Almost uniformlythe city required grantees to build two streets or wharves, one ateither end of the length of their lots and each parallel to the river.These streets were to be constructed by the grantees at their ownexpense, were to be dedicated and applied to the use of the public,and were to be maintained in perpetuity for the benefit of thepublic and the city by the grantee, his assigns or heirs. Sometimes,additional responsibilities would be added. When in 1758 the Cor-poration granted to Oliver Delancey a large lot in trust for thechildren of Sir Peter Warren, the deed included covenants for theconstruction of a forty-foot-wide wharf or street on the insideboundary of the lot, a forty-foot wharf or street on the outside ofthe lot, a fifteen-foot wharf to run from Cortlandt Street to theHudson that would front a slip to be made and left by Delancey,which would itself be dedicated to public use, plus two posts to beput on the latter wharf twenty feet from one another that could beused by boats for docking. Moreover, it was stipulated that "allprofits, fees, perquisites, and Emoluments arising or accruing from
39. It may be that there was collusion and corruption, although my reading of theexchange in the Independent Reflector suggests, rather, that the particular dispute wasbetween two groups competing for grant privileges from the corporation, with the losercharging corruption. Even the editor of the Independent Reflector, who was hardly oneto shy away from criticism of the city's government, seemed at the end to accept the factthat the practices complained of in the first letter were routine and legitimate (althoughhe tried to shift ground to a general critique of the Corporation's manner of giving awayproperty calling it a "Transgression" and a violation of "Duty"). TBE INDEPENDENT RE-FEcTOR, supra note 37, at 118-27, 151-56.
40. The following discussion is based on a close examination of all the Corporationdeeds held in the collections of the New York Historical Society (about 50 in number),and a more cursory survey of BooK B of the GRANT Boons oF nmE Crry held at theMunicipal Archives and Records Center, New York City.
41. Until after the Revolution very few grants were made along the Hudson.42. See, e.g., Corporation Grant to T. Jeffreys, GRANr BooK B (Apr. 19, 1735),
Municipal Archives and Records Center, New York City. See note 40 supra.43. See, e.g., Corporation Grant to S. Farmer, Ellison Family Papers (July 24, 1766),
N.Y. Historical Soc'y. See note 40 supra.
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the wharf or street [running by the slip] shall be taken and receivedby the Mayor Aldermen and Commonalty" of the city. These cove-nants had to be satisfied within seven years or the Corporationwould repossess; the waterlot would again become part of the estateof the Corporation.44
In fact, the terms that the Corporation imposed on granteeswere hard and in many cases rigorously enforced. Grantees camebefore the Common Council to give up their grant because theycould not meet the terms of the covenants in the time available.41
And we might guess that the costs and risks imposed thereby meantthat only the most calculating and enterprising merchants wouldapply for and accept grants from the city.46
The point is not that grantees did not benefit from theirgrants. They applied for the grants, anxiously worked out financ-ing arrangements that would allow them to meet the terms im-posed by the city,4 T and by and large abided by those terms forreasons that presumably had something to do with long term eco-nomic advantage and gain. But to look only to the private cui bonowithout at the same time considering the benefit to the city and itscorporate entity is to lose sight of the calculated ways grants ofproperty could function as an instrumentality of governmentalaction.
44. Corporation Grant to Oliver Delancey, Delancey Deeds (Mar. 13, 1758), N.Y.Historical Soc'y. See note 40 supra.
45. See 4 MINUTES OF THE COMMsON COUNCIL 212 (June 29, 1734) for the petition ofJacob Goelet and Abraham Van Wyck, the executors of the Last Will and Testament ofMr. Andre Teller, who had petitioned for and been granted a waterlot for the use of hisdaughter. The grant had included a covenant for "Docking Out the same within A Cer-tain Limited time, which Neither the Said Child nor we the Executors are Capable ofperforming." And the "privilege" of the grant was transferred to Stephan Bayard.
46. In 1772 and 1773 a group of merchants living in the Dock Ward petitioned fora grant of waterlots opposite their properties-between the Exchange and Coenties Slip.The Corporation insisted that any grant was contingent on accepting a covenant to con-struct a large basin in the middle of the waterlots. And the merchants had to ask forarbitrators to apportion the costs of construction between them. Some of them "wouldderive greater Advantage from the said Grants than others and of Consequence ought tobear a greater Proportion of the Expence." The arbitrators eventually developed a formulafor the merchants that divided both costs and profits of building the basin into 2800 parts.The Basin, according to the grant, was to be left open for 20 years "provided the sameshall during the time be found convenient for navigation, of which the said [Corpora-tion] . . . shall be the judges." And at the end of 20 years, when the basin could be filledin, proprietors would have to build a public street across the filled land. See CorporationGrant to James Van Cortlandt, Augustus Van Cortlandt, and Frederick Van Cortlandt,N.Y. City Deeds, Box 8 (Feb. 3, 1773), N.Y. Historical Soc'y; Corporation Grant to PeterJay, N.Y. City Deeds, Box 8 (Feb. 3, 1773), N.Y. Historical Soc'y; Corporation Grant toHendrick Remsen, N.Y. City Deeds, Box 8 (July 10, 1772), N.Y. Historical Soc'y; Arbitrators'Report, Box 8. See note 40 supra.
47. See N.Y. Historical Soc'y; Arbitrators' Report, Box 8.
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If city management in 18th century America was largely de-fined in terms of the protection and sustenance of commerce, asJon Teaford suggests, then what waterlot grants offered (and typi-fied) was a way of expanding and developing the commercial heartof the city. To Sam Bass Warner and other historians, such activitymight stand as an archetypal example of the kind of "privatism"we so deplore in modern life: the subsidization of private gains bypublic agencies and the definition of social goals in terms of privateadvantage.48 But, from a less anachronistic perspective, what water-lot grants offered, and what they typified in the business of theCorporation of the city of New York, was the possibility of achiev-ing positive governmental goals-paving the streets, developing theharbor-at a time when there was no technology of direct govern-mental action. How do you get something done if you do not knowhow, or rather, cannot conceive of doing it yourself? You get some-one else to do it for you. In provincial America and in GeorgianEngland most local governments could only get those things donethat had always been done, or that had at least always been sup-posed to be done, since the only sanction available was punishmentfor not acting. One cannot after all punish someone for not doingwhat he or she did not know constituted an obligation. On theother hand, a chartered city with substantial property rights coulduse its wealth to achieve goals-to induce change-through sanc-tions and rewards, even in the absence of a technology of directgovernmental action.49 And ultimately the singularity of the Cor-poration was defined by this possibility of change, by the ways inwhich sovereignty was blurred in the achievement of positive goals.
III. NEW YORK IN THE NEW REPUBLIC: THE SEPARATION OF
PUBLIC AND PRIVATE ACTION
What happened to this singular institution in the years afterthe Revolution? Waterlot grants continued, although with subtlemodifications. In 1791, for example, Alexander Macomb wasgranted a huge lot between Delancey and Rivington Streets in anarea of the city just beginning to undergo rapid development. The
48. S. WARNER, PRIVATE CrrY 8-21 (1968). This is not to say that Warner's ownanalysis of 18th century Philadelphia is not fully appreciative of the complexity andfunctionality of what he calls "privatism."
49. See N. ROSENBERG, TECHrNOLOGY AND AMERIcAN ECONoamic GROWTH (1972) for theargument that forms of organizations are a kind of technology.
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terms of the grant were complex, but reduced to basics, the cityitself proposed to build public slips on either side of this waterlot,and Macomb covenanted to build a street or wharf alongside bothslips whenever so required by the Corporation. No completiondate was set; the work was made contingent on a decision by theCommon Council. More important, instead of requiring him tobuild a street at the rear of his grant, the deed asserted that"whereas it may or will become necessary for the public conve-nience that there should be laid out or regulated one or morestreet or streets leading across the said hereby granted premises"and that these should be taken by the public "without paying there-for," some part of the premises granted should be reserved in ad-vance for streets. Macomb therefore covenanted that he "shall orwill not on any pretence whatsoever exact or demand of or fromthe said [Corporation] ... any compensation or payment for anysuch part or parts of the said hereby granted premises as may bedeemed necessary or required . . . for the purposes of making,laying out and regulating such street or streets as aforesaid." Ma-comb could not profit from any taking by the city; but he himselfwas not obliged to build a street for public use. Street building wasbecoming a public responsibility, a positive obligation of a publicinstitution.50
Other waterlot grants exhibited similar features. It seems tohave become routine to require street or wharf construction pro-spectively. Grantees were to commence covenanted obligations onlywhen so ordered by Common Council ordinance, but not before.Such a practice may simply mean that waterlots were being givenout ahead of the demands of city planning. But it presumably alsoindicated the growing separation of public from private action.Prior to the Revolution, a covenanted grant embodied a publicobligation expressed in the private terms of a real estate deed. Now,in the new world of 19th century America, a private deed wouldserve private purposes, and public action would await public ex-pression.51
50. 9 DePeyster Papers 20 (1791), N.Y. Historical Soc'y. See note 40 supra.51. See, e.g., Corporation Grant to Thomas Ellison, Ellison Papers (Jan. 3, 1804),
N.Y. Historical Soc'y; Corporation Grant to George Lindsay, Murray Papers; MiscellaneousManuscripts M (Feb. 10, 1804), N.Y. Historical Soc'y; Corporation Grant to John Mc-Kesson, McKesson Papers, Box 5, 24-40 (Jan. 19, 1808), N.Y. Historical Soc'y; CorporationGrant to J.R. Murray, Murray Papers, Miscellaneous Manuscripts M (Jan. 24, 1814), N.Y.Historical Soc'y; Corporation Grant to Stephan Beekman, N.Y. City Deeds, Box 14 (Mar.24, 1828), N.Y. Historical Soe'y. See note 40 supra.
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Over the twenty year period between the end of British occu-pation and the first years ofthe 19th century the management ofcity property remained one of the most important aspects of thebusiness of the Common Council. Waterlots were granted out, theferry monopoly reaffirmed, markets regulated, stalls leased, and alarge portion of the common fields sold off at auction to pay forthe accumulated war debts of the city 2 But however importantcity property remained in the fiscal structure of city government, 3
it was no longer defined as a continuing instrument of governmen-tal policy. When one half of the upper commons went up for salein the 1790's, the deeds contained no covenants or restrictions onthe fee." Sovereignty and landlordship had parted ways, and thepersonal authority of the Corporation ended at the point of sale.
But if there was a single symbolic moment when public andprivate action were wrenched apart, when tie Corporation becamein the narrow sense a "public" Corporation, it occurred in the1804 case of Corporation v. Scott5 The case concerned a disputeover slippage rights to a slip and pier that extended more than400 feet into the East River; issues of control and governmentalauthority were complicated by the fact that the covenanted claimsof the Corporation went beyond the grants contained in the Mont-gomerie Charter. The state supreme court declared that the Cor-poration could have no right to slippage, even if covenanted in adeed and even though the state legislature had specifically author-ized the extension beyond the 400 foot limit, because the land onwhich the pier was erected had never been properly granted to theCorporation56 (conveniently forgetting of course that the argumentmight also invalidate the claims of the defendant).57 The city couldnot profit from its grant; judgment was given to Scott.
The decision in Scott turned on an argument made for Scottby Alexander Hamilton and Robert Troup. Putting aside all con-siderations of the uses that the city would or would not make ofthe slip, attorneys Troup and Hamilton baldly asserted that theCorporation could have no beneficial interest in its property. "Theywere simply trustees,.... to grant to others a right, in considera-
52. S. POMERANTZ, NEW Yoaa: AN AMEmCAN Crry 1783-1803, at 226-96 (1938).53. Id. at 355-71.54. See, e.g., Deed and Release to Gilbert C. Willett, Murray Papers, Miscellaneous
Manuscripts M (Feb. 25, 1799), N.Y. Historical Soc'y.55. 1 Cai. R. 543 (N.Y. Sup. Ct. 1804).56. Id. at 548.57. Id. at 546 (argument of Riggs and Harison, in reply, for plaintiffs).
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tion of a service or duty performed. '05 Riggs and Harison, coun-
sel f6r the Corporation, tried in reply to shift the focus of discus-sion to the "public convenience of the city," which they thoughtjustified an argument that "the acts and grants must be liberallyconstrued" in favor of the CorporationY But the point made byTroup and Hamilton could not be overcome. The property of thecity, however the city came by it, was held as a public trust, as atrust presumably for the benefit of the whole public of the State ofNew York.
In the 1780's the New York State Council of Revision had re-ferred to cities-and particularly New York City-as "independentrepublics," as autonomous private entities incongruously locatedwithin the larger republican polity. In vetoing several acts relatingto New York City, the Council did all it could to restrict the city'spowers and influence, but the Council still accepted, if reluctantlyand resentfully, the city's status as a wealthy, independent, andprivate corporation. 0
By the turn of the century, however, New York City was be-coming a distinctively public corporation, increasingly dependenton the state for the positive governmental authority that wouldreplace its former wealth as a tool of action and planning. ForChancellor Kent, the moment of decisive transformation mighthave occurred in 1804 when the state legislature passed a bill in-creasing the number of wards into which the city was divided. Heconvinced the Council of Revision to veto the measure as con-taining "important alterations in the charter" without the consentof the parties to the charter-presumably the "Mayor, Aldermenand Commonalty" of the city of New York. But the legislaturewent ahead and passed the bill into law over the objections of theCouncil,0 ' and thereby certified the dependent status of the city.From then on, the legislature could and would supersede the char-ter at will; New York City was a mere creature of the state, amunicipal corporation.61
For others, the moment of transfiguration might have comewith the passage of ordinances like the one passed in 1803 creating
58. Id.59. Id. at 547.60. A. STREET, THE COUNCIL OF REVISION OF TnE STATE OF NEw YORK 251-52, 257, 261-
64, 266-67, 274-76, 295-98 (Albany 1859).61. Id. at 327-28.62. See J. KENT, supra note 25, at 199-273.
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a Department of Scavengers responsible for the disposal of humanwaste and other garbage that residents left outside their doorsteps.Until then everyone had been responsible for sweeping his or herown offal into the river, and the city had a complicated scheduleensuring that private individuals fulfilled their public responsi-bilities. 3 Now, in the new world of 1803, human waste disposal-sewage-would be a municipal service, an affirmative undertakingof the city.
In any event, by the 1820's the separation of governmentalpower from property was certainly complete. Revenue from thecity's real estate constituted only a miniscule proportion of thefinances of the city. And of that real estate, the vast majority wascommitted to narrowly public uses: public wharves, piers, slips,ferries, and the actual public buildings of the city." Landlordshipwas no longer a part of the personality of the city.
More important, city governance was defined as nothing buta delegation of the positive authority of the state. There remainedno lingering attachment to government by indirection, to theexercise of "public" power through the manipulation of privaterights. Public power, as narrowly conceived, described the person-ality of the Corporation.
In 1823, for example, the Common Council passed an ordi-nance proscribing any future interments into the cemeteries oflower Manhattan. Dead bodies were a health hazard in the now-crowded conditions of the old city, and the Council acted under astatute that had specifically authorized municipal control of ceme-teries. 5
The various churches of lower Manhattan sued to reclaimwhat they considered their vested rights in their cemeteries. Theircase rested not only on the usual unjust taking argument of ag-grieved property owners but also demonstrated that some of themheld their cemeteries as pre-Revolutionary grants and leases from
63. NEW YORK Crry, NEW YORK, A Law for the Appointment of a Superintendent ofScavengers, LAws AND ORDINANcEs OF THE Crry oF NEw YoRK 42 (1805). See also NEIwYoR, A Law for cleaning the streets, lanes and alleys of the said city, LAws, ORDERS AND
ORDINANCES 19 (1731); NEW YoRK Crry, NEw YoRK, A Law for paving and cleaning theStreets, Lanes and Alleys, LAws, STATUrES, ORDINANCES AND CONSTITUTIONS 28 (1736); NEWYORK CITY, NEW YORK, A Law to regulate the Paving and Keeping in Repair of theStreets, LAws AND ORDINANCES ORDAINED AND EsrABuSsrn 14 (1793).
64. Black, The History of Municipal Ownership of Land on Manhattan Island,1 STUDIES IN HIST. ECON. & PUB. L. 80 (1891).
65. 2 Rev. L. 445, § 267 (1813), cited in Coates v. Mayor of New York, 7 Cow. 585,603 (N.Y. 1827).
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the Corporation itself, which had in express covenants guaranteedto them the right of interment."' The Corporation, they argued,was estopped from declaring burials a nuisance.? And the ordi-nance was both unconstitutional and a breach of quiet enjoyment. 8
The courts, however, disagreed. The Corporation, said ChiefJudge Savage, "had no power, as a party to make a contract whichshould control or embarrass their legislative powers and duties." '0
Sixty years ago, when the lease was made, the premises were beyondthe inhabited part of the city. They were a common; and boundedon one side by a vineyard. Now they are in the very heart of thecity. When the defendants covenanted that the lessees might enjoythe premises for the purpose of burying their dead, it never enteredinto the contemplation of either party, that the health of the citymight require the suspension, or abolition of that right. It wouldbe unreasonable in the extreme, to hold that the plaintiffs shouldbe at liberty to endanger not only the lives of such as belong tothe corporation of the church, but also those of the citizens gener-ally, because their lease contains a covenant for quiet enjoyment.70
The courts all agreed that private actions of the Corporation couldnot limit or control the public governmental authority of the cityof New York.
By the 1820's, then, the charter and its vested property rightshad become little more than a distant point of origin-almost ahistorical curiosity-that bore no relationship to the actual prac-tice of government in New York City. The singularity and auton-omy of the city as a local government had been obliterated. NewYork City was a public corporation like other public corporatiofis,a municipal corporation like other municipal corporations.'
CONCLUSION
If this interpretation of the history of authority in New YorkCity is correct, what does it tell us about the general history of theCorporation? Remember, the conventional wisdom assumes thatthe entrepreneurs of the early Republic were emulating publicforms of organization when they looked to city charters as models
66. Coates v. Mayor of New York, 7 Cow. 585 (N.Y. 1827); Brick Presb. Church v.Mayor of New York, 5 Cow. 538 (N.Y. 1826). See also Mayor of New York v. Slack, 3 Whell.Grim. Cases 237 (Common Pleas 1824), aff'd, 7 Cow. 585 (N.Y. 1827).
67. Coates v. Mayor of New York, 7 Cow. 585, 592-98, 602 (N.Y. 1827).68. Brick Presb. Church v. Mayor of New York, 5 Cow. 588, 539 (N.Y. 1826).69. Id. at 540.70. Id. at 542. See also Vanderbilt v. Adams, 7 Cow. 849 (N.Y. 1827); Ross v. Mayor
of New York, 3 Wend. 333 (N.Y. Sup. Ct. 1829).71. See People v. Morris, 13 Wend. 325 (N.Y. Sup. Ct. 1835).
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of corporate organization. The history of the business corporationhas been written as a history of an emergence into privateness(privacy): as the story of how businessmen and legislators onlygradually discarded the attributes of public organization and con-trol. But, if the history of the business corporation is described asan emergence into privacy, then the history of the municipal cor-poration might be read as an emergence into publicness (or pub-licity), as the story of how cities lost their wealth-created autonomyand became integrated into a centralized system of public author-ity. The "public" city corporation spawned the private businesscorporation; the "private" city corporation spawned the publicmunicipal corporation. Both gestations occurred at approximatelythe same time; yet, they stand in near total contradiction with oneanother. What sort of magical fish was this 18th century corpora-tion? And how did it produce such differing offspring?
To answer those questions, to resolve that paradox, we shallhave to discard our easy reliance on anachronistic assumptions ofthe mutual exclusivity of public and private spheres of action. Menand women of the first half of the 18th century did not organizethe world into the categories common to our experience and toour legal system. They not only thought different thoughts, theythought those thoughts differently. Where we see a legal universeof repressive and mutually exclusive categories of law against poli-tics, substance against procedure, and public against private, it maybe that Americans then saw a universe in which the main institu-tions of social order were integrated and joined in a complex andunstable pattern of authority and hierarchy.7 2 Legal discourse didnot depend on the preexistence of delimited and dichotomouscategories of thought.
And if we would hope to understand the history of the corpo-ration in America, we shall have to discard our easy "Whiggish"assumptions about change and continuity, and our legal languageof contradiction and exclusivity. If a corporation was not private,as we understand the term, it does not mean that it was public, aswe understand the term. It may be that like the Corporation of thecity of New York, corporations could be both things at once, thatprivate wealth and public authority might be integrated in a beingwhose existence was dedicated to the governance of a complex,commercial community.
72. For similar arguments, see D. CALHOUN, THE INTELLIGENCE OF A PEOPx (1973);M. FOUCAULT, THE ORDER OF THINGS (1971).
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